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Chico’s Names Younger Chain

NEW YORK — Chico’s new division for 25-to-35-year-olds, to be called Pazo, will launch with eight stores in the first quarter of fiscal 2003.<br><br>"Our plans are for Pazo to be a cutting-edge store for the contemporary, fashion-conscious...

NEW YORK — Chico’s new division for 25-to-35-year-olds, to be called Pazo, will launch with eight stores in the first quarter of fiscal 2003.

“Our plans are for Pazo to be a cutting-edge store for the contemporary, fashion-conscious woman,” said Chico’s vice president Barry Shapiro, who is heading up the launch of Pazo, in a statement. “Merchandise will be presented in a boutique atmosphere that is unique and fun, with the newest European and American fashion at impulse prices. We will provide a service level that complements this shopping experience.”

Scott Edmonds, president and chief operating officer, added: “The strength of our executive management team, combined with our strong balance sheet, has given us the ability to test this new concept. Interestingly enough, we have found that landlords [have responded well to] the new concept. We do, however, want to assure the Chico’s customer and our stockholders that the Chico’s design and product development team, as well as the field management team, will remain completely focused on the Chico’s brand.”

He told WWD that Chico’s will introduce new categories of merchandise within “the four walls” of the Chico’s stores, but declined to specify.

He also said he doesn’t expect Pazo units, which will have 2,500 to 3,000 square feet of selling space, to be as productive as Chico’s units, which post $835 in sales per square foot. “Pazo speaks to a different customer and will employ entirely separate design, product development and field management teams.” Pazo means country manor in Spanish, Edmonds noted.

The Fort Myers, Fla.-based Chico’s, with 338 stores in 40 states and Washington, sells private label women’s casual clothing and related accessories. Its volume last year was $378 million, and it continues to grow rapidly.

At a conference in Boston earlier this year, Charles Klemen, chief financial officer, said the first units of the new division would probably be in Atlanta, San Diego, Washington and Charlotte, as well as Florida and Texas. He also said the division will target household incomes of $40,000 to $60,000, a younger and less affluent customer than the Chico’s chain, and feature outfits about half the price of those at its sister division. The company declined to specify the sites, pending finalization of leases.

As reported, merchandise for the new division has been tested since the start of fiscal 2001 at Chico’s stores.